When selling a home, confusion about contracts can add to the stress.
Solicitors handle the legal process, but you may still have many questions.
One of those questions may be: Who signs the contract first?
It’s a common question which we’ll answer in this blog.
When selling a house who signs the contract first?
In England, Wales, and Northern Ireland, the seller usually signs a contract first when selling a property.
The seller’s solicitor usually creates the first draft of the contract, which the seller signs. Next, the buyer’s solicitor checks it, and – if they approve – the buyer signs.
However, it doesn’t matter who signs the contract first.
The agreement isn’t legally binding when sellers sign it. It only becomes legally binding once the contracts are exchanged.
For example, say the seller has already signed the contract, but the buyer still needs to. The seller can still withdraw from the sale if:
- The buyer tries to change the terms
- The seller’s solicitor is unhappy about a part of the arrangement.
Once paperwork is signed, both solicitors discuss the final details. If they are both happy, the contracts will be exchanged.
Scotland
In Scotland, buyers usually sign first.
This is because there is a period where missives (formal letters) are exchanged between sellers’ and buyers’ solicitors. Buyers send out the first missive, so they technically sign first.
During this period, either party can back out without penalty before the contract is exchanged.
Why contracts are signed after selling houses
Once the sale price of a home is agreed, both parties (overseen by solicitors) sign contracts with all the final details.
Once you have exchanged the contracts, then the sale becomes legally binding.
This doesn’t always mean it’s irreversible, but there will now be financial penalties for breaking the agreement (unless there are good grounds for it). This is almost the point of no return.
If the buyer backs out of buying after signing the contract, they’ll lose their deposit. If the seller backs out, they’d most likely become liable for all the costs incurred by the buyer.
When selling a property, the only other document sellers need to sign is the Property Transfer Deed (or TR1 form). This is a legal document that transfers the ownership of the property from you to the new buyer.
Sellers’ solicitor may ask them to sign this before or after the exchange of the contracts. It needs to be ready for completion day.
What sellers receive as proof of sale
Sellers do not need anything specifically as proof of the property’s sale.
However, they can ask their solicitor for the relevant sale documents regarding the transfer of funds for a house sale.
Once this money has been received, keys are handed over and the sale is complete.
Sellers’ solicitors complete the relevant legal documents, which sellers can request if they wish. Buyers’ solicitors update the Land Registry – buyers can obtain a copy for a small fee.
Things to consider before signing a house sale contract
Are you ready?
Is now the right time to complete the sale? Do you have another home to move into or need more time to sort out your affairs? Don’t be afraid to delay the process if you’re feeling rushed.
Check the details
You’ll be working with a highly qualified solicitor, but it’s always a good idea to check over the contract yourself. A solicitor should be happy to discuss any terms you don’t understand.
Ask questions
Be bold, and don’t ask as many questions as needed. Selling a home is a huge undertaking, and you need to be comfortable with the process. If you have doubts, speak up to give yourself peace of mind.
Be sure you want to sell
Once the contracts have been exchanged, it’s always possible to back out. If you don’t feel comfortable signing the agreement, then don’t. Yes, it may be inconvenient for others, but you must put yourself first.
It can feel awkward to delay the process, request documents, or ask many questions, but you shouldn’t be shy about it.
Selling a home is a massive milestone in your life; sometimes, you need a little reassurance.
